Welcome to the Sunday Briefing newsletter where we share some of the interesting lessons in life, business, and investing that we’ve come across during the week.
What we’ve been reading
The death of a macroeconomic measure. A good lesson for how flawed macroeconomic accounting can create illusory results. My favorite paragraph:
Economics is not physics. There are no “divinely-ordained” constants that govern the system. The averages that economic variables exhibit, and the settling points towards which they gravitate, can and do change as secular conditions in economies change. This fact is true of almost anything “economic” that we might measure–growth rates, interest rates, inflation rates, asset valuations, and profit margins.
No one cares anymore about Microsoft’s Q2 2004 revenue growth. They care that Microsoft generates lots of cash over time because it has a moat. Understanding moats – why they exist, how they are defended, etc. – is long-term knowledge. When you view it this way you realize that the revenue and cash flow information is a short-term reflection of the moat.
Company of the week
Our company of the week is Walmart inc. It’s easy to underestimate Walmart’s scale and dominance when you look at the simplicity of the business. Consistency matters little, however, if you can’t safely determine the 10-year outlook for the retailing landscape.
Quote of the week
Nelson Mandela on integrity.
“As I have said, the first thing is to be honest with yourself. You can never have an impact on society if you have not changed yourself. Great peacemakers are all people of integrity, of honesty, but humility.”
Integrity is what we do when the lights are out.
Have a great coming week,